**Introduction to the Cambiant Model**

**Use of flow over a cambered surface as a physical analog of economic
performance**

**Abstract **

In this working paper, the author explores the use of flow over a cambered surface as a physical analog of economic performance, constrained by the physical characteristics of the surface and flow. As a physical analog, the model develops force coefficients that have direct economic equivalents. The model simulates a lifting surface or wing, ‘flown’ through an atmosphere of potential transactions.

A surface was developed by fluid dynamic methods to approximate the income distributions generally representative of a developed country. The force coefficients for growth and cost of production show that the efficiency of the economy may be evaluated by the ratio of the growth coefficient to the cost of production coefficient, with the rate of growth achieved at a given ratio being driven by the creation of value within the economy.

The force coefficients for Sweden vs. the United States are compared for the same 1979-2007 period, showing that an economy with a growth coefficient/cost of production ratio close to maximum will achieve a higher GDP growth rate. Growth coefficient values beyond the optimum ratio show a dramatic increase in the cost of production coefficient and growing income inequality, causing increasing drag on economic performance, which can lead to collapse of growth and asset value as the limits of the growth coefficient are reached. The cambered surface properties were incorporated into an aerodynamic simulation, restricted to three degrees of freedom, producing a parsimonious model that reproduces the general dynamic properties of an economy, including rate of growth, plus long and short term cyclic behavior, and establishes a performance envelope in which an economy can operate with stability.

Various economic conditions are evaluated, including basic simulations of stimulus and debt induced instability. The author proceeds to discuss the use of simulation vs. mathematical economic models, use of the simulation to avoid the problems of aggregations of agent behavior. The use of Cambiant simulations for facilitating economic and environmental policy evaluations is considered, along with the potential of future developments of flow analog simulations.

**Cambiant Model**